9th Circuit Sides With Google in $8.5 Million Cy Pres Settlement in Privacy Case

A three-judge 9th U.S. Circuit Court of Appeals panel upheld a district court decision to approve an $8.5 million cy pres-only settlement in a class-action lawsuit against Google, which plaintiffs alleged violated their privacy by revealing their personal search engine terms. Attorney Ted Frank, of the Competitive Enterprise Institute (CEP), representing several objectors to the settlement, said he plans to appeal the decision. Judge Margaret McKeown, who wrote the Tuesday opinion (in Pacer) and was joined by Judges Jay Bybee and, in part, Clifford Wallace, said the District Court for the Northern District of California "did not abuse its discretion" in approving the settlement, to which Google agreed in exchange for a release of the claims of about 129 million people who used the search engine from 2006 to 2014. Several plaintiffs seeking class-action status sued Google in 2010, saying the company operated its search engine in a manner that violated the Stored Communications Act (SCA) and state law by disclosing users' personal information such as search terms to third parties, said a 2015 brief filed by plaintiffs who objected to the settlement. Eventually, the parties settled and the district court certified the class for settlement with final approval in 2015. Of the funds, $3.2 million were earmarked for attorneys' fees and $5.3 million for cy pres recipients: AARP; the Berkman Center for Internet & Society at Harvard University; Carnegie Mellon University; the Illinois Institute of Technology Chicago-Kent College of Law Center for Information, Society and Policy; the Stanford Center for Internet and Society; and the World Privacy Forum. They agreed to use the funds for public awareness and education and/or R&D on internet privacy. But plaintiffs against the settlement, led by CEP's Frank, said the $8.5 million was enough to fund a claims process or lottery distribution to class members and "improperly favored the third-party charities," said the 2015 brief. It also said the cy pres recipients were "tainted" since they had pre-existing relationships with class counsel and Google, which has donated money to some of those organizations. McKeown in her decision said the district court "appropriately" found the cy pres recipients could address the SCA objectives and advance interests of the plaintiffs and three organizations that disclosed past funding by Google, with some even challenging company policies in the past. She also rejected any problem with any link between the cy pres recipients and class counsel. Partially dissenting, Wallace took issue that nearly half the settlement was being donated to the alma maters of class counsel. Frank said he will "petition for rehearing and rehearing en banc on or before September 5." A Google spokesperson said it was pleased with the decision.